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GAO-13-319R:
United States Government Accountability Office:
Washington, DC 20548:
March 27, 2013
Congressional Addressees
Subject: DOD Procurement of Mi-17 Helicopters:
This letter and enclosed briefing slides responds to the Senate Armed
Services Committee report 112-173 accompanying the 2013 National
Defense Authorization Act, which directed GAO to review the Department
of Defense (DOD) procurement of Mi-17 helicopters through
Rosoboronexport, a Russian state-owned arms export firm. In response,
we reviewed: (1) the reasons for DOD’s cancellation of a 2010
competitive solicitation for 21 Mi-17 helicopters; (2) the extent to
which DOD evaluated the availability and feasibility of alternative
procurement approaches for military or civilian variants of the Mi-17
helicopter; and (3) DOD’s assessment of the impact that contracting
directly with Rosoboronexport may have had on the risk of access to
technical data, aircraft safety, and counterfeiting.
To address our objectives, we reviewed key documents in the Navy and
Army Mi-17 contract files, including the solicitation; determination
and findings; source selection plan; and cost and price analysis. We
reviewed DOD internal memorandums, DOD audit reports, bid protest
decisions, related hearing transcripts, and external DOD
correspondence. We interviewed officials at DOD’s Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics;
Army’s Non-Standard Rotary Wing Aircraft Project Management Office;
Naval Air Systems Command; Combined Security Transition Command—-
Afghanistan; Army’s Aviation Engineering Directorate; and the
Department of State. In addition, we interviewed four potential
vendors of Mi-17 helicopters, selected based on their interest in past
and planned Mi-17 procurements.
We conducted this performance audit from October 2012 through [Date]
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
In summary, DOD’s Office of the Secretary of Defense directed the Navy
to cancel its competitive solicitation for 21 civilian Mi-17s because
Russian authorities told DOD in late 2010 that, in accordance with
Russian law, they would sell the helicopters only through
Rosoboronexport since they were intended for military end use.
Specifically, in response to letters written by the U.S. Ambassador to
Russia, the Russian Ministry of Foreign Affairs confirmed to DOD that
it considered the Mi-17s to be military because they were for use by
the Afghan Air Force, and therefore could be sold only through
Rosoboronexport, the sole entity responsible for Russian military
exports.
DOD did not assess alternative means for procuring Mi-17s after
verifying that Russia would sell the helicopters to the United States
only through Rosoboronexport. The Navy’s original procurement strategy
in 2010 was to purchase civilian Mi-17s and subsequently add weapons
to them for use in Afghanistan. However, given the Russian
government’s determination, DOD officials stated that no alternative
approaches to procure the helicopters were available to them as any
attempt to procure a new civilian aircraft without going through
Rosoboronexport could be blocked by the company, and purchasing used
helicopters posed safety concerns. Although some potential vendors
told us that, if allowed, they could provide these aircraft to DOD at
a lower cost, an Army analysis determined that the price paid to
Rosoboronexport for the Mi-17s was reasonable and fell within the
historical range of the unit price paid for similar aircraft.
DOD determined that the Rosoboronexport contract offered the Army
greater access to technical information from the original equipment
manufacturer and increased assurance of safety compared to previous Mi-
17 contracts. However, the risk of counterfeiting may be similar. The
2011 contract with Rosoboronexport provided Army officials with
extensive access to the original equipment manufacturer’s facilities
and allowed for technical discussions on the aircraft’s design,
testing, and manufacturing processes. This level of insight enabled
the Army to determine that the Russians’ process was sufficient by
U.S. standards to certify airworthiness. However, both Rosoboronexport
and other vendors have purchased new Mi-17s that came from the
original equipment manufacturer—-a practice used to decrease the risk
of counterfeiting. Therefore, we found no evidence that shows how
Rosoboronexport would decrease the risk of counterfeit parts over
other vendors if aircraft were purchased new from the original
equipment manufacturer.
We provided a draft of this report to DOD and State for comment. In
its written comments, reproduced in Enclosure II, DOD generally agreed
with our findings. In addition, DOD provided technical comments that
we incorporated, as appropriate. State provided no comments.
We are sending copies of this report to the Secretaries of Defense and
State and appropriate congressional committees. In addition, the
report will be available at no charge on the GAO website at
[hyperlink, http://www.gao.gov].
Should you or your staff have questions concerning this report, please
contact me at (202) 512-4841 or courtsm@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Major contributors to this report are
John Neumann, Assistant Director, Leigh Ann Nally; Ellen Ramachandran;
John Krump; Pete Anderson; and Roxanna Sun.
Signed by:
Michael Courts:
Director, Acquisition and Sourcing Management:
Enclosure:
List of Addressees:
The Honorable Carl Levin:
Chairman:
The Honorable James Inhofe:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Richard Durbin:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Buck McKeon:
Chairman:
The Honorable Adam Smith:
Ranking Member:
Armed Services Committee:
House of Representatives:
The Honorable Bill Young:
Chairman:
The Honorable Pete Visclosky:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure: DOD Procurement of Mi-17 Helicopters:
Preliminary:
DOD Procurement of Mi-17 Helicopters:
Congressional Briefing:
For more information, contact Michael Courts, courtsm@gao.gov.
Contents:
* Introduction;
* Objectives, Scope, and Methodology;
* Summary;
* Background;
* Objective 1: Reasons for Canceling Navy Solicitation;
* Objective 2: Alternative Procurement Approaches to Rosoboronexport;
* Objective 3: Impact on Access to Technical Data, Safety, and
Counterfeiting;
* Detailed Scope and Methodology.
[End of section]
Introduction:
* To support the Afghan military, the Department of Defense (DOD) has
been procuring Russian-made Mi-17 helicopters due to their ability to
operate in the high elevations of Afghanistan.
* Prior to 2010, DOD competitively procured some Mi-17 helicopters
through U.S. companies, whose subcontractors purchased them new from
the original equipment manufacturer in Russia.
* In 2010, the Navy initiated a competitive procurement for 21 Mi-
17sin a civilian variant but canceled the solicitation and transferred
responsibility for it to the Army.
* In 2011, the Army contracted with a Russian state-owned arms export
firm, Rosoboronexport, to purchase 21 Mi-17 military helicopters with
the option to buy 12 additional aircraft.
* Members of Congress have criticized the Army contract for its
structure and cost, and because of Rosoboronexport’s alleged arms
sales to Syria.
Objectives, Scope and Methodology:
* Senate Report 112-173, accompanying the 2013 National Defense
Authorization Act, directed GAO to review the current process for
procuring Mi-17 helicopters through Rosoboronexport.
* Specifically, we reviewed:
1. The reasons for DOD's cancellation of a 2010 competitive
solicitation for 21 Mi-17 helicopters;
2. The extent to which DOD evaluated the availability and feasibility
of alternative procurement approaches for military or civilian
variants of the Mi-17 helicopter; and;
3. DOD’s assessment of the impact that contracting directly with
Rosoboronexport may have had on the risk of access to technical data,
aircraft safety, and counterfeiting.
* We reviewed key documents in Mi-17 contract files, DOD internal
memorandums, bid protest decisions, related hearing transcripts, and
external DOD correspondence.
* We interviewed officials from DOD’s Office of the Secretary of
Defense, Army, Navy, and Combined Security Transition Command–
Afghanistan, as well as officials from Department of State. We also
interviewed potential vendors of Mi-17s, selected based on their
interest in past and planned Mi-17 procurements.
* For a complete discussion of our scope and methodology, see slides
28-31.
Summary:
* DOD’s Office of the Secretary of Defense directed the Navy to cancel
its competitive solicitation for 21 civilian Mi-17s because Russian
authorities told U.S. government officials in late 2010 that, in
accordance with Russian law, they would only sell the helicopters
through Rosoboronexport since the aircraft were intended for military
end use.
* DOD did not assess alternative means for procuring Mi-17s after
verifying that Russia would only sell the helicopters to the United
States through Rosoboronexport. Some potential vendors we spoke to
told us that, if allowed, they could provide these aircraft at a lower
cost; however, an Army analysis determined that the price paid to
Rosoboronexport for the Mi-17s was reasonable.
* DOD determined that the Rosoboronexport contract offered it greater
access to technical information from the original equipment
manufacturer and increased assurance of safety compared to previous Mi-
17 contracts. However, the risk of counterfeiting may be similar.
Background: Mi-17 Helicopters:
* The Mi-17 is a multi-use transport helicopter that was developed by
the former Soviet Union for use in Afghanistan and that is now widely
used throughout the world.
* Since 2005, the United States has been procuring Mi-17s to build the
capacity of the Afghan military and is working toward a total fleet
size of approximately 80 helicopters. The Afghan military had
approximately 50 Mi-17s as of 2012, and the Army currently plans to
purchase at least 30 additional Mi-17s.
* Mi-17s can be produced in either civilian or military variants.
Military variants contain features that differ from civilian variants,
such as increased power supply and structural reinforcements to carry
external weapons.
* New Mi-17s are produced in Russia by the original equipment
manufacturer, Russian Helicopters.
* Another Russian state-owned company, Rosoboronexport, is the sole
authorized exporter of military end use products from Russia.
* As a result of multiple violations of U.S. law, Rosoboronexport was
subject to U.S. sanctions that were imposed in 2006 and lifted in 2010.
Background: History of DOD Mi-17 Helicopter Procurements:
* In 2009, the Navy procured four new civilian Mi-17s from a
Huntsville-based firm, Defense Technologies Inc., whose subcontractors
purchased the aircraft from the original equipment manufacturer.
* In July 2010, the Navy released a competitive solicitation for 21
new Mi-17s in a civilian variant. At the direction of the Office of
the Secretary of Defense, the Navy canceled this solicitation and
transferred the requirement to the Army in December 2010.
* In January 2011, the Army issued a solicitation for military Mi-17s
with plans to award the contract to Rosoboronexport. DOD justified the
need for Mi-17s from Rosoboronexport based on the public interest
exception to the Federal Acquisition Regulation requirement to provide
for full and open competition. Several U.S. firms filed bid protests
related to the procurement of 21 Mi-17s, but all protests were denied
or dismissed.
* The May 2011 contract with Rosoboronexport contained options for DOD
to purchase an additional 12 military aircraft. DOD exercised these
options in 2012.
* In November 2012, the Army issued a request for information to
identify potential sources from industry to purchase an additional 30
military Mi-17s.
Background: DOD Procurement of 21 Mi-17 Helicopters:
[Refer to PDF for image: timeline]
January 19, 2010:
Office of the Secretary of Defense designates Army as the lead service
for Mi-17 procurement and support.
May 21, 2010:
Sanctions on Rosoboronexport are lifted.
July 6, 2010:
Navy issues competitive solicitation for 21 civilian Mi-17s.
October and November 2010:
U.S. and Russian diplomats exchange letters on Mi-17 procurement.
November 5, 2010:
GAO denies two bid protests related to the procurement.
December 16, 2010:
Office of the Secretary of Defense transfers procurement from Navy to
Army.
December 20, 2010:
Navy cancels competitive procurement.
January 13, 2011:
Army publishes notice indicating intent to award sole source contract to
Rosoboronexport.
February 23, 2011:
Vendor files protest in U.S. Court of Federal Claims.
May 20, 2011:
U.S. Court of Federal Claims decides in favor of the government,
May 26, 2011:
Army issues contract to Rosoboronexport for 21 military Mi-17s.
Source: GAO analysis.
[End of figure]
Objective 1: Reasons for Canceling Navy Solicitation:
DOD Canceled Mi-17 Solicitation after Learning That Russia Would Sell
Them Only through Rosoboronexport:
* DOD’s Office of the Secretary of Defense directed the Navy to cancel
its competitive solicitation for 21 civilian Mi-17s because Russian
authorities told U.S. government officials in late 2010 that, in
accordance with Russian law, they would only sell the helicopters
through Rosoboronexport since the aircraft were intended for military
end use.
* DOD confirmed Russia’s position after the U.S. Ambassador to Russia
wrote two letters to the Russian Ministry of Foreign Affairs in
October and November 2010 to obtain the Russian government’s official
position on the procurement.
* One letter from the U.S. Ambassador cited DOD’s understanding based
on previous purchases that the Mi-17s were determined to be civilian
by the Russian Ministry of Defense and thus were not controlled by
Rosoboronexport.
* In response, the Russian Ministry of Foreign Affairs clarified that
it considered the Mi-17s to be for military use because they were to
be used by the Afghan Air Force. These officials stated that the
procurement had to occur through a direct contract with
Rosoboronexport, the sole entity responsible for Russian military
exports.
* Representatives from three out of the four potential Mi-17 vendors
we spoke with told us there is disagreement on who the appropriate
authority is to make that decision. The fourth vendor did not raise
this as an issue.
* One vendor’s analysis of Russian law stated that only the Russian
Ministry of Defense can certify an export as civilian or military.
This vendor received letters from the Russian Ministry of Defense in
January and September 2010 indicating that the Ministry saw no
barriers to exporting the aircraft in the proposed civilian
configuration.
* State Department and Army officials told us that the Russian
Ministry of Defense is not currently responsible for making this
determination.
* In ruling on a bid protest challenging the Navy’s cancellation, the
Federal Court of Claims found that DOD’s actions to clarify the law
through diplomatic channels via the U.S. Embassy in Russia served as a
reasonable basis for canceling the solicitation.
* While the Navy solicitation was ongoing, DOD was in the process of
establishing the Army’s Non-Standard Rotary Wing Aircraft Project
Management Office to centralize its management of Mi-17s and other non-
standard rotary aircraft.
* DOD’s Office of the Secretary of Defense transferred the requirement
to procure Mi-17s to this new office shortly before canceling the Navy
solicitation.
Objective 2: Alternative Procurement Approaches to Rosoboronexport:
DOD Did Not Assess Alternative Approaches, but an Army Analysis
Determined Price Paid for Mi-17 Was Reasonable:
* DOD did not assess alternative means for procuring Mi-17s after
verifying that Russia would only sell them through Rosoboronexport.
* The Navy’s original strategy in 2010 was to purchase civilian Mi-17s
and subsequently add weapons to them for use in Afghanistan. The
Russian government’s determination that these 21 Mi-17s were
considered military exports differed from previous procurements. DOD
officials told us that the Russian government ignored DOD’s military
end use of the civilian helicopters during the time that
Rosoboronexport was subject to sanctions.
* Senior DOD officials stated that any attempt to procure a civilian
aircraft for military end use without going through Rosoboronexport
could be blocked by the company.
* When the procurement was transferred from the Navy to the Army, the
Army changed the requirement from civilian to military Mi-17s. An Army
official told us that the military configuration had always been more
desirable, so the Army pursued this option once the sanctions against
Rosoboronexport were lifted.
* DOD officials stated that purchasing used Mi-17s on the secondary
market was not a viable option because they had experienced safety and
maintenance problems with used aircraft in the past.
* Representatives from two vendors we spoke with stated that the
Army’s solicitation of military Mi-17s limits competition to only
Rosoboronexport.
* These representatives told us that other civilian Mi-17s have the
same operational capabilities as the military variant sought by the
Army and believe that it would not require a contract with
Rosoboronexport. DOD officials disagreed with this statement.
* Further, representatives from one vendor said it was currently in
communication with Russian Helicopters, which indicated that it could
modify a civilian Mi-17 to a military configuration at the original
equipment manufacturer with assurance of airworthiness. DOD officials
stated that this option would still require DOD to take additional
steps to ensure airworthiness. They also stated that it does not
address the current Russian determination that Mi-17s must be sold to
DOD through Rosoboronexport.
* In response to congressional interest, DOD released a request for
information in November 2012 seeking alternative procurement
approaches for 30 additional Mi-17 military helicopters.
* An official from the Office of the Secretary of Defense stated that
DOD was not aware of alternatives to contracting with Rosoboronexport
at this time, but will reassess once they evaluate responses from the
request for information.
* Although the Army requested it, Rosoboronexport did not provide
certified cost and pricing data, stating that it was prohibited from
doing so under Russian law. The Army performed an analysis based on
historical prices paid by U.S. and foreign buyers, in accordance with
the Federal Acquisition Regulation.
* The aircraft used for purposes of comparison all had different
configurations. For example, one aircraft used for a point of
comparison was a military variant that contained no armament, whereas
another aircraft was a civilian variant.
* Despite the differences in configuration among these aircraft, Army
officials were able to determine that the unit price paid to
Rosoboronexport-—$17.15 million—-fell within the historical range and
was therefore reasonable.
* Beyond the analysis conducted in accordance with the Federal
Acquisition Regulation, Army officials conducted another analysis
comparing the costs of the Rosoboronexport contract with the estimated
costs of procuring the same aircraft through a U.S. vendor, provided
they are not blocked by Rosoboronexport.
* Based on this estimate, Army officials told us that buying military
aircraft directly from Rosoboronexport was less costly than buying a
civilian aircraft from a U.S. vendor and then modifying it to a
military configuration.
* Additionally, a DOD Independent Review Team, including members from
the Defense Contract Audit Agency and Defense Contract Management
Agency, reviewed the Army’s contract with Rosoboronexport and
determined that the negotiated price was fair and reasonable.
* We did not compare the cost-effectiveness of the procurement
approaches taken by the Army and the Navy because the aircraft
obtained were not the same configuration.
* Two potential vendors we spoke with stated they could modify the
aircraft in a military configuration at a significantly lower cost
than Rosoboronexport, if allowed, but the Army maintained that the
price paid in 2011 was reasonable given the extensive modifications.
* Although these vendors said it was possible for them to modify an Mi-
17, the Army said that this option raised airworthiness issues.
Neither vendor has ever completed these military modifications.
Objective 3: Impact on Access to Technical Data, Safety, and
Counterfeiting:
Although DOD Determined Rosoboronexport Contract Offers Greater Access
to Manufacturer and Increased Assurance of Safety, the Risk of
Counterfeiting May Be Similar:
* Prior to the 2011 contract with Rosoboronexport, the Army did not
have the design knowledge and technical data necessary to certify
airworthiness, which ensures a greater level of safety for Mi-17s.
* Moreover, according to an Army report, Army engineers were not able
to verify the process used by Russia to certify airworthiness of
civilian aircraft, in part because stringent U.S. trade sanctions
prevented the Army and DOD from directly engaging with Russian
entities.
* As such, the Army faced substantial risk in fielding the Mi-17
helicopters prior to the Army procurements.
* The Army took multiple steps to mitigate this risk. For example, for
some aircraft in the Afghan fleet, it imposed costly reductions in the
operating time of aircraft components. These reductions were necessary
because the Army could not determine their life expectancy.
* Once the Army gained access to the original equipment manufacturer
through the 2011 contract with Rosoboronexport, Army officials
reported millions of dollars in cost avoidance by eliminating these
reductions.
* The 2011 contract with Rosoboronexport provided DOD officials with
extensive access to the original equipment manufacturer's facilities
and allowed for technical discussions on the aircraft’s design,
testing, and manufacturing processes. DOD officials stated that this
level of access was unprecedented and they would not have received
this access under another contract.
* Although DOD did not obtain the technical data for the 21 Mi-17s,
the level of insight that the Army gained into the Russian process for
assessing safety and airworthiness enabled the Army to issue a
memorandum certifying that the Russians’ process met U.S. standards
for airworthiness.
* Army officials also emphasized the benefits of having the original
equipment manufacturer add weapons to Mi-17 aircraft rather than
having the modifications done later by a third party on civilian
aircraft. They said the benefit of this approach is that it ensures
that militarization is aligned with airworthiness.
* Army officials stated that in the past DOD had operated used Mi-17s,
and in maintaining those aircraft, they had identified numerous
instances of counterfeit parts that affected safety and airworthiness.
* For example, in a recent overhaul of a refurbished, civilian Mi-17,
Army engineering officials identified 35 parts that were either not
authentic or suspect counterfeit parts.
* Due to the prevalence of Mi-17s on the world market, counterfeit or
substandard parts have been a long-standing problem with the
helicopter.
* An Army official told us that obtaining new aircraft through the
original equipment manufacturer decreases the risk of counterfeit
parts because this manufacturer has greater knowledge of its supply
chain.
* A 2010 report by the U.S. Department of Commerce found that there is
a lower incidence of counterfeit parts when they are obtained directly
from an original equipment manufacturer.
* The Army’s contract with Rosoboronexport provided it a direct
relationship with the original equipment manufacturer, which increased
the Army’s confidence that it was receiving authentic parts.
* Both Rosoboronexport and two previous vendors purchased new Mi-17s
that came from the original equipment manufacturer and Army officials
said no known issues with counterfeit parts have been identified to
date.
* As such, we found no evidence that shows how Rosoboronexport would
decrease the risk of counterfeit parts over other vendors.
Detailed Scope and Methodology:
* To determine why DOD canceled its 2010 competitive solicitation for
21 Mi-17s:
- We reviewed key documents in Navy and Army Mi-17 contract files,
including the solicitation; determination and findings; source
selection plan; and cost and price analysis.
- We reviewed DOD internal memorandums, bid protest decisions, related
hearing transcripts, and external DOD correspondence.
- We also interviewed officials from DOD’s Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics, Naval
Air Systems Command, Combined Security Transition Command–Afghanistan,
and the Department of State.
* To assess the extent to which DOD evaluated alternative procurement
approaches:
- We reviewed Mi-17 contract files, DOD internal memorandums, bid
protest decisions, related hearing transcripts, and external DOD
correspondence.
- We interviewed officials from the Army’s Non-Standard Rotary Wing
Aircraft Project Management Office; Office of the Under Secretary of
Defense for Acquisition, Technology, and Logistics; Naval Air Systems
Command; and Combined Security Transition Command–Afghanistan.
- In addition to DOD officials, we interviewed four potential vendors
of Mi-17 helicopters, which were selected based on their interest in
past and planned Mi-17 procurements.
- To compare the costs of buying civilian versus military variants of
the Mi-17, we reviewed Army cost and pricing analysis, Mi-17 contract
files, and DOD audits.
* To assess the impact of contracting directly with Rosoboronexport on
technical data, safety, and counterfeiting:
- We reviewed Army airworthiness standards, an Army audit report, and
best practices for ensuring authentic parts.
- We analyzed documentation provided by the Army to determine the
prevalence of these issues in prior procurements.
- To determine how these issues affected DOD procurement decisions, we
interviewed officials from Army’s Non-Standard Rotary Wing Aircraft
Project Management Office; Office of the Under Secretary of Defense
for Acquisition, Technology, and Logistics; and the Army’s Aviation
Engineering Directorate.
* We conducted this performance audit from October 2012 through [Date]
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of Enclosure I]
Enclosure II: Agency Comments:
The Under Secretary of Defense:
Acquisition, Technology and Logistics:
3010 Defense Pentagon:
Washington, DC 20301-3010:
March 29, 2013:
Mr. Michael Courts:
Director:
Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Courts:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) Draft Report, GAO-13-319R, "DoD
Procurement of Mi-17 Helicopters," dated March x, xxxx.
I find the audit summary and body of the report generally consistent
with DoD's rationale for cancellation of the 2010 Navy solicitation
and decision to contract with Rosoboronexport, but it was a
significant matter that the Department of State lifted the sanctions
against Rosoboronexport just prior to the Navy's solicitation. That
event and the ensuing diplomatic exchange of notes required a new path
for the Department to address the needs for military end-use aircraft
in theater.
The clear and validated statements from the Russian government
indicated that there was no alternative source to Rosoboronexport for
military end-use aircraft and resulted in the acquisition as executed.
It is worth re-emphasizing that the Navy's decision to cancel the
solicitation and the Army's contract with Rosoboronexport were fully
reviewed by GAO's bid protest group and the United States Court of
Federal Claims and found to be legally supportable. Finally, regarding
the risk of counterfeit parts, I agree that a commercial or military
aircraft purchased from an Original Equipment Manufacturer (OEM) has
essentially the same risk for counterfeit parts. However, ensuring low
risk for counterfeit parts was only one of the considerations of
contracting with Rosoboronexport. The requirement was for a military
end-use aircraft, so contracting with Rosoboronexport as required,
vice another vendor, also included access to engineering data and an
OEM airworthiness certification for the military end-use aircraft.
We appreciate the opportunity to comment on the draft report.
Technical comments were provided separately for your consideration.
Should you have any questions, please contact Mr. David Ahern, Deputy
Assistant Secretary of Defense for Strategic and Tactical Systems, at
David.Ahern@osd.mil or 703-697-9386.
Sincerely,
Signed by:
Frank Kendall:
[End of section]
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